#1Dalmia Bharat Limited February, 2019 1#2Contents 1 2 3 4 Cement Industry in India Dalmia Overview Amalgamation Completed Our Business Model 5 Active Board + Professionally Managed 6 Roadmap for Next 3 years 7 Inclusive Growth 8 Partnering in India's Growth Model Dalmia Bharat Limited 2#3Fastest growing Economy (For the last 5 quarters) 7.9 7.5 8.2 Dalmia Bharat Limited 7.7 7.2 7.1 7.00 6.8 6.8 6.9 6.9 6.8 6.7 6.5 6.7 6.7 6.7 6.1 6.5 5.7 Q1'17 Q2'17 China GDP Q3'17 Q4'17 Q1'18 -India GDP Q2'18 Q3'18 Q4'18 Q1'19 Q2'19 GDP Forecast for Next 2 Years Source: IMF, Bloomberg 7.4% 6.4% 3#4Cement Industry in India 4#5Reforms leading to structural changes Factor Dalmia Bharat Limited Earlier Now Impact Change Limestone access Allotment Auction Consolidation 2015 Supply 2013 Land Acq Law Govt. Private Squeeze Credit Availability Easy Selective Consolidation 2017 Insolvency Law Difficult Quick Consolidation 2017 5#6Impact of Limestone Auction EARLIER NIRMA SAGAR ME 28 new entrants Better Everyday mam WONDER CEMENT CK PERFECT SHURUAAT ABG CEMENT wer lets you dow 59 MnT added NOW 18 blocks auctioned 50% won by Top 5 Dalmia Bharat Limited 31% of Greenfield 1 NEW entrant (adani 6#7Rising Replacement cost due to Land Minimum Size 1 MnT 5600/T 4% 3 MnT 8800/T 17% 18% 16% 22% 11% 62% 50% 2007 2017 Plant and Machinery CPP ■Civil Work Land Entry cost 560 cr Source- Goldman Sachs India Cement Stressed Asset Analysis Dalmia Bharat Limited 2650 cr 7#8Acceleration in consolidation Exited 10 players 26 MnT Stress 5 players 27 MnT Dalmia Bharat Limited 5% of capacity 6% of capacity 8#9Further consolidation is expected Capacity Share 76% ~81% 5 5 40% 12 2 9 3 2007 2018 2021E ■Large Companies (>20 MnT) ■Mid Sized Companies (10-20 MnT) Capacity share of >10 MnT will be 81% by 2021. Dalmia Bharat Limited 9#10Demand 10#11Robust cement demand continues.. YoY Growth -1% Apr-17 Source:- IIP -5% -1% -3% 1% 1% 0% May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 -1% Nov-17 Dec-17 18% 23% 22% 20% 18% 17% Jan-18 Feb-18 14% Mar-18 Apr-18 May-18 14% Dalmia Bharat Limited 18% 14% 13% 13% 12% 11% 11% 9% Jun-18 Jul-18 Aug-18 Sep-18 Oct-18 Nov-18 Dec-18 11#12Construction run rate up 3x Cement (MnT) 7 10 18 29 29 26 % of announced 2% 3% 5% 8% 6% 8767 Houses/day 3288 4932 13151 13964 4.8 3.8 3.2 No. of houses (Mn units) 1.2 1.8 FY15 FY16 FY17 Dalmia Bharat Limited 418 MnT Expected cement demand 60 Mn Houses announced FY18 9MFY19 12 Source:- Ministry of Rural Development, Ministry of Housing and Urban Affairs * annualized#13Road construction picking up pace Cement (MNT) 21 12 16 Roads/day (km) 27 26 26 Roads (km) 9829 10000 5729 FY18A Source:-Ministry of Road Transport & Highways YTD'FY19 FY19'E Dalmia Bharat Limited 180 MnT Expected cement demand 83,677 km Roads announced 13#14600 MnT opportunity (FY18-23) Major Projects Potential Cement Demand (MnT) Housing For All 418 Roads 180 Total 598 Dalmia Bharat Limited 14#15Assuming only 20% of announced is executed Dalmia Bharat Limited (Fig in MnT) 298 FY18 8% CAGR 438 (E) FY23E As at 9MFY19, Cement Demand is 246 MnT (14% YoY). (Source:- IIP) 15#16Narrowing Demand Supply Gap 16#17Incremental Demand likely to exceed supply Narrowing Demand Supply Gap Demand Supply Period Growth Growth Last 15 Yrs 7% 8% Last 10 Yrs 6% 11% Last 5 Yrs 3% 5% Next 5 Yrs 8% 4% Dalmia Bharat Limited FY18 FY19E FY23'E Capacity Utilization 62% 67% 79% 17#18Future Industry Structure FY18 FY21'E Top 5 47% 55% Dalmia Bharat Limited FY18 FY21'E Top 10 62% 70% 18#19Dalmia : Overview 19#20Last 10 years Dalmia Bharat Limited 10 year CAGR 22% 21% 15% Capacity 7x Revenue EBITDA 7x 4x 2008 3.5 MnT Rs. 1315 cr Rs. 506 cr 2018 25 MnT Rs. 8828 cr Rs. 2014 cr 20#21Last 10 years FY'08 : 3.5 MnT 1 plant in 1 state South (3.5 MnT) Our Markets FY'18 : 25 MnT 11 plants in 8 states South (12.1 MnT) Dalmia Bharat Limited East (9.3 MnT) North East (3.6 MnT) Our Markets 21#22Amalgamation completed 22#23Salient Features Dalmia Bharat Limited Pre Merger Post Merger 6 2 Simplification of Corporate Structure subsidiaries subsidiaries Listed Entities Total outstanding shares (No. of shares) 2 1 8.9 cr 19.2 cr 3.8 cr 9.0 cr Free Float (No. of shares) (43%) (47%) Alignment of all Stakeholders' interests 23#24Simplified corporate structure... One listed entity Dalmia Bharat Limited New Current Structure Promoters Others 53.2% 46.8% DBL* 100% DCBL# Listed entity * Record Date for issue of new shares of merged entity to eligible DBL shareholders shall be communicated shortly. # Kalyanpur Cement & Calcom Cement are the remaining subsidiaries. 24#25Assets Liabilities Amalgamated Balance Sheet Dalmia Bharat Limited Particulars (Rs. cr.) Equity Capital Reserves & surplus Net Worth Debt Other Liabilities TOTAL Pro-Forma Pre Merger As at 30th Sep 2018 Amalgamated Post Merger As at 30th Sept 2018 Change 18 39 21 6,269 10,273 4,004 6,287 10,311 4,024 7,119 7,119 1,676 1,676 15,082 19,106 4,024 Goodwill & Intangibles 784 4,809 4,024 Other Non Current Assets 10,530 10,530 Cash & Cash Equivalents 3,306 3,306 Net Current Assets 462 462 TOTAL 15,082 19,106 4,024 Resulting in free cash flow of Rs. 1500 cr. To be realized over a period of 6 to 8 years 25#26Our Business Model 26#27Strong focus on pricing - Branding matters Dalmia Bharat Limited South* East 12% "A++" 19% Dalmia DSP 40 Concreto *60 /bag "A" /bag ACC&Ambuja Dalmia Ultratech Lafarge "B" Birla Corp Century, Shree Konark North East "A++" "A++" 15% Dalmia DSP 33% 9% 15% Dalmia DSP *55 "A" *100 35 60 /bag Ultratech Dalmia India, /bag /bag /bag "A" Ramco *Tamil Nadu market "B" Orient Priya, Penna JK Cement Dalmia Star Cement "B" Topcem Amrit Max 27#28Focus on super premium brands Dalmia Bharat Limited DELTA 25 POWER Dalmia DSP CEMENT CUSTOMER CARE 1800 420 3031 DHALAI EXPERT DSP DHALAI EXPERT Dalmia FBC CEMENT Premium over 'A' category - Rs. 25-30 per bag 28#29Premium Brand Naked Cement Realization (Rs./T) Dalmia Bharat Limited 5 Yr Avg. 10 Yr Avg. Peers FY18 9M'FY19 (FY14-FY18) (FY09-FY18) Peer Average* 2,916 2,886 2,975 3,145 Dalmia Bharat Limited 3,443 3,361 3,572 3,391 Higher than 18% 16% 20% 8% average *Top 4 players in industry 29#30Execution of best practices Dalmia Bharat Limited Multi fuel kilns and boilers ✓ Power consumption <70 KwH/t Hv Blended cement ~ 80% Attained water neutrality of 2.5x Lead distance <300 kms Competitive interest cost at 8% 30#31Continued focus on cost optimization Dalmia Bharat Limited Q3 FY 18 Q2 FY19 Q3 FY 19 Future Dalmia FBC CEMENT Composite Cement^ 1% 13% 15% 20% (% of total volume) Alternate fuel 3% 4% 4% 10% (as % of fuel mix) Green Power* (% of total captive power) 4% 9% 9% 22% Acts as a mitigating measure to tackle rising Slag and Pet Coke prices. ^ comprises of both slag and fly-ash *Comprises of Solar Power & Waste Heat Recovery System 31#32Resultant Performance 32#33Comparison with Peers EBITDA (Rs./T) Dalmia Bharat Limited 5 Yr Avg. 10 Yr Avg. EBITDA (Rs./ Ton) FY18 9M'FY19 (FY14-FY18) (FY09-FY18) Peer Average* 856 907 905 819 Dalmia 1,134 1,076 1,201 951 Bharat Limited Higher than average 33% 19% 33% 16% *Top 4 players in industry 33#34Active Board + Professionally Managed 34#35Active Board (Independent Directors) Dalmia Bharat Limited P.K. Khaitan Chairman, DBL Founding member, Khaitan & Co. G.N. Bajpai Chairman, DCBL • Former Chairman of SEBI and LIC KHAITAN &CO Advocates since 1911 भारतीय प्रतिभूति और विनिमय बोर्ड Becurities and Exchange Board of India LIC भारतीय जीवन बीमा निगम LIFE INSURANCE CORPORATION OF INDIA Paul Hugentobler: Board Member, DCBL Ex-Member, Holcim Executive Committee • Sudha Pillai: Board Member, DBL & DCBL • Ex-Assistant Secretary, Ministry of Mines, IAS - 1972 V S Jain: Board Member, DBL • Ex-Chairman - Steel Authority of India D N Davar: Board Member, OCL Holcim Govt. of India MINISTRY OF MINES सेल SAIL THE WORLD BANK IFCI LIMITED • Ex-Chairman - IFCI & retired consultant to World Bank 35#36Dalmia Bharat Limited Professional Management Gautam Dalmia Managing Director • Over 26 years of experience in cement and sugar industries. Holds a B.S and an M.S. degree in Electrical & Electronic Engineering from Columbia University. Puneet Dalmia Managing Director . • Has 14 years of experience in cement industry. Gold-Medalist, M.B.A from IIM-Bangalore and B. Tech from Indian Institute of Technology- Delhi. Mahendra Singhi (Group CEO, Cement) • More than 40 years of experience in cement sector. • Also serving as Vice President of Cement Manufacturer's Association (CMA). • Chartered Accountant and a Science and Law graduate. Jayesh Doshi (Whole Time Director and Group CFO) •Has over 33 years of corporate experience in Capital Allocation, M&A & Treasury Management. • Chartered Accountant and a Law graduate from Bombay University. Ujjwal Batria (Group COO) •Has overall 33 years of experience in companies like Lafarge, Nuvoco, Tata Steel etc. Holds a B.Tech degree from BIT Mesra. 36#37Roadmap for next 3 years 37#38Strengthening Leadership Position in East & Maharashtra Current 26 MnT ~50% FY21E: 37 MnT Karnataka Jharkhand Dalmia Bharat Limited 12 plants in 9 states Serving 22 states 17 plants in 10 states Bihar Assam Meghalaya West Bengal Maharashtra Orissa Andhra Pradesh Bihar Assam Meghalaya Jharkhand West Bengal Orissa Andhra Pradesh Karnataka Existing Plants Tamil Nadu Inorganic Growth (3 MnT) Tamil Nadu Organic Growth (7.8 Mnt) All India Capacity Share -5% All India Capacity Share - 7% 38#39Estimated Market Share Maharashtra Karnataka Jharkhand Assam Bihar Meghalaya West Bengal Orissa Andhra Pradesh Tamil Nadu North East East South* Dalmia Bharat Limited Capacity (MNT) Capacity Share (%) Rank 12.1 7 5 15.1 9 4 Capacity Capacity Rank (MNT) Share (%) 9.3 12 3 18.2 20 1 Capacity Capacity Rank (MNT) Share (%) 3.6 26 1 4.0 28 1 FY18 FY21 *Including Maharashta 39#40Rationale for new capacity addition in East East GDP Growth rate surpasses the All India GDP Growth rate 18.0% Dalmia Bharat Limited Dalmia's Capacity Utilization peaking in East 87% 9.0% 7.6% 7.1% 6.7% 77% 1.0% 73% FY16 FY17 FY18 East GDP Growth All India GDP Growth East Cement demand growth surpasses All India Demand growth. 15% 19% 6% 4% 4% -1% FY17 FY18 All India Demand Growth FY16 FY16 FY17 FY18 Consolidation leading to increased Market Share of Top 5 players in East 74% 80% ■East Demand Growth FY15 FY18 Per capita Cement Consumption in East 209 kg vs All India average 239 kg. 40#41New capacity of 4 MnT under Insolvency and Bankruptcy Code Dalmia Bharat Limited Partnering in Key Macro Economic Reforms Kalyanpur Cement, Bihar Capacity: 1.1 MnT Integrated Unit Industry Leading to Consolidation • Production commenced for Kalyanpur. ● Achieved in record time frame of 5 months. • Reinstated all essential requisites ● Achieved guaranteed clinker production. Additional Clinker capacity Lead Distance Market Share Murli Industries Limited, Maharashtra Capacity: 3 MnT Integrated Unit, 50 MW CPP Provides us deeper footprint in Maharashtra market. The High Court has passed a favourable order and the matter needs to be heard & cleared at the NCLT. 41#42Prudent Capital deployment at $65/T Dalmia Bharat Limited Diversification and Capacity expansion at $70/T Capacity addition in Future at $56/T 100% 94% 78% 26 25.0 25.0 25.0 25.0 61% 68% 57% 52% 51% 51% 51% 45% 46% 43% 7 1 4 3.5 6 12 12 11.8 9 29 29 37 35 42 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19E FY20E FY21E FY22E Cement Capacity CU% Forex rate :- Rs.70/$#43Our Balance Sheet Dalmia Bharat Limited FY15 FY18 Q3FY19 Gross Debt (Rs. Cr.) 8,487 7,276 6,732 Net Debt (Rs. Cr.) 6.376 3,762 3,496 EBITDA (Rs. Cr.) 934 2,014 1,883* Net Debt/EBITDA 6.8x 1.7x 1.9x Cost of Debt 10% 8.1% 8.2% 43 *Trailing 4 quarters#44Inclusive Growth (Focus on sustainable business practices) 44 #4#451st Rank in CDP League Table for Low Carbon Economy Transition Dalmia Bharat Limited League Rank Table Company League Table weighted rank 1 Dalmia Bharat 4.64 2 Ambuja Cement 5.62 3 Cementos Argos 5.90 4 Shree Cement 5.91 5 Lafarge Holcim 6.03 This serves as a proxy for business readiness for implementation of Paris Agreement First cement company and 3rd Indian Company to join RE100. Google Coca-Cola Nestle Infosys Source: CDP Cement Report 2018 BT TATA Dalmia RE 100 is a global association of those progressive companies who pledge to consume 100% renewable electricity for their operations by 2030. 45#46Thrust on Sustainability Dalmia Bharat aims big on climate action 900^ Global 526^ average* Group average* Carbon Negative by 2040 342^ Eastern operations* *data as on FY18 ^CO2 emission- Kg/ton of cement Dalmia Bharat Limited 46#47Partnering in India's Growth Model 47#48Chennai Metro, Tamil Nadu Dalmia Bharat Limited A ONZE 48#49Tata Kalinganagar, Odisha Dalmia Bharat Limited 49#50Advanced Landing Ground, Pasighat, Arunachal Pradesh Dalmia Bharat Limited 50#51Thank You 51